Q4 Logistics and Transportation Trends: Booming Economy Ties the Year’s Growth Numbers Up in a Bow

October 25, 2018

Len BatchaPresident, Technical Transportation Inc.

The transportation and logistics industry is rounding out a great year, and we are on track to see some of our best growth numbers in recent years.

While the retail sector typically leads the way in Q4, with a good portion of their revenue coming during the holiday season, we believe--thanks to a broad-based booming economy--most sectors of the industry will ring in a prosperous new year as we welcome 2019.

But that’s just one headline out of several we see for this quarter.

The great economy. Gains across the board.

The entire U.S. economy is indeed expanding right now across all industries. Unemployment is low, consumers are spending discretionary income, and companies are making more capital purchases -- all of which point to great things happening.

In addition, the tariffs implemented by the Trump administration seem to be working in our favor at the moment. The international community is responding by relaxing tariffs on their end as well, which is creating more opportunities for the U.S. manufacturing and services industries, including the logistics and transportation sectors.

Outside of a major geopolitical event or a complete overhaul in the U.S. Congress during this election cycle, we don’t see this trend changing dramatically as we end the year.

In the transportation industry, specifically, we’ve seen a lot more activity across the board. Over the past six months, we’ve noted that the industry is in fact ahead of its totals in tonnage per shipments from last year. More importantly, transportation companies are able to get fair market value for their services, encouraging growth in infrastructure and customer service across the board.

Short-term relief for the driver's shortage.

The economic situation is also expected to provide short-term relief for our industry’s driver shortage. As transportation companies gain more financial health, they’re able to make their job offers healthier as well.

While that certainly helps attract new drivers, it won’t easily solve the problems that arise from government regulations on driver age and electronic monitoring devices. We will soon have to address those issues as an industry and form long-term solutions such as team driving and load sharing.

Renewed scrutiny on service and standards.

The booming economy is also providing more entrepreneurial opportunities for individuals. In the transportation and logistics industry, this has taken shape in the form of Uber and Lyft delivery drivers.

Traditional shipping procedures require a waybill, manifest, proof-of-delivery and sign-off. But with today’s new technology platforms, we’re able to use smartphones and tablets to obtain signatures, take pictures, and show proof of product delivery. Combine that with the easily accessible Uber and Lyft model, and you have the ability for individuals to deliver small products to homes for retailers.

In the past, holiday deliveries were largely performed by FedEx and UPS drivers who worked until 8 p.m. or later during the holiday season to ensure the “Amazon Prime protocol” of second-day deliveries was efficiently met. This year, you’ll likely see your local Uber driver in an unmarked car and casual clothes alongside them making similar deliveries.

While this shift is ideal for a free market society, we believe it will also open the door for more scrutiny on customer service and delivery standards. After all, will the Uber and Lyft drivers be effectively trained to perform any necessary white glove deliveries, or ensure the proper proof-of-delivery is made? Will the customer experience suffer?

One thing almost certain is that Uber and Lyft drivers won't be able to deliver big-ticket items such as furniture and appliances in the home, or even new large or sensitive equipment to commercial locations. Those items will likely still be managed through the traditional network for some time to come.

What trends do you see?

Did we miss anything here that's on your mind? Send us a note today at info@techtrans.com.